Courtesy of Katie H.
Globalization Overview
Globalization of media has been occurring very rapidly over the past 10 years. Not only has the internet created a world where everyone is your neighbor, but television, films, and music have also become similar in countries miles apart. So how has the media industry been able to share their information so quickly? Before the 1980’s, most national media companies were domestically owned radio stations, television stations, and newspapers. Now combining forces, or creating mergers, has given small businesses the ability to grow not only vertically but horizontally (The Nation, 2002). Many companies you will see own many aspects of both production and distribution of the product, which will make it easier to spread their message around the world.
In the first half of 2000, the deals in global media, Internet, and telecommunications totaled around 300 billion dollars, which is triple the figure for the first half of 1999 (Leary, 2005). These media conglomerations are out sourcing to other countries in hopes of finding additional revenue. Why else are they choosing to branch into the global market? There are three basic reasons for using this strategy. First, domestic markets are saturated with media products and see the international markets as the key to their growth. Second, media giants are often in a position to effectively compete with and even dominate the local media in smaller countries. And lastly, by distributing media products to foreign markets, media companies are able to tap a lucrative source of revenue at virtually no additional cost (Croteau & Hoynes, 2006).
Let’s explore each of these categories a little further. First we stated that domestic markets have become saturated with media products. In the US alone there are 520 feature films created a year. Nigeria and India are the only two countries that are ahead of the US. Nigeria produces 872, and India produces 1,325 feature films bringing them in at number one (Charts Bin, 2009). Also, while the numbers of magazines in the US have been going down, they are still drastically higher than many countries overseas. In 1999 there were 31,076 magazines in the US, today that number has dropped to a low 22,652 (American Society of Magazine Editors, 2009). In the UK the number of magazine titles has increased by 24% in the last ten years with a total of only 8,466 magazines (PPA Marketing, 2006). This very easily brings us to the second reason that US companies are seeking globalization.
Many companies feel that they are in a position to effectively compete with and even dominate the local media in smaller countries. They often can draw upon their capital resources to produce Hollywood blockbusters, which would be beyond the capability of local media. Also, big media giants can adapt their already successful practices for new markets (Croteau & Hoynes, 2006). The highest average production budgets are found in USA ($14.53m), followed by UK($9.48m), Germany ($5.68m), France ($5.53m) and Ireland ($5.08m). Three out of these five countries are English-speaking. This shows impact of language on a film’s potential revenues and its production costs (Hancock, 1998).
Finally, by distributing existing media products to foreign markets, media companies are able to tap a lucrative source of revenue at virtually no cost (Croteau & Hoynes, 2006). This is allowing the big media companies to produce films in the US and gain additional revenue by releasing the films to other companies. CEO of the new Time Warner, Gerald Levin, noted that in 1993, the company’s publishing, music, and studio divisions generated about 40% of their income from outside the United States (Croteau & Hoynes, 2006). By opening up the products you have made to these other countries you are increasing your company’s audience as well. The more people that recognize your television station or distributing house, they will become familiar with which companies are producing high quality materials.
These three strategies have allowed the United States to branch into the global market, broaden their horizons, and reap the benefits from it. But what about the rest of the world? Are they reaping the same benefits that the United States is? Much of Europe has seen a rise in profit from their feature film industry. The UK, France, and Germany have especially seen their investment pay off. All three counties have been investing more in the production of the film and in turn have seen an increase in the number of films produced and the amount of viewership (Hancock, 1998).
While a majority of the world’s media seems to be coming from the Unites States, many of the newspapers, magazines, or television shows you are watching have be based off global influences. From Americas Next Top Model to The Office, the world has been inspired by what everyone has to offer. By increasing the amount of production and companies utilizing horizontal integration, distribution of media is easier than it has ever been, creating a world where everyone a neighbor.
References
(2002, January 14). Retrieved from The Nation: http://www.thenation.com/special/bigten.html
(2006). Retrieved from PPA Marketing: http://www.ppamarketing.net/cgi-bin/wms.pl/219
(2009, October 1). Retrieved from Charts Bin: http://chartsbin.com/view/pu4
(2009, November 30). Retrieved from American Society of Magazine Editors: http://www.magazine.org/ASME/EDITORIAL_TRENDS/1145.aspx
Croteau, D., & Hoynes, W. (2006). The Business of Media: Corporate Media and the Public Interest. Thousand Oaks: Pine Forge Press.
Hancock, D. (1998, August 29-30). Global Film Production. Retrieved from http://www.obs.coe.int/oea_publ/eurocine/global_filmproduction.pdf.en
Leary, C. (2005, December 15). Retrieved from Associated Content: http://www.associatedcontent.com/article/14523/globalization_in_the_media_pg2_pg2.html?cat=27
